Four Tips for Negotiating with Your New EHR Vendor

Gone are the days when a physician owner or a practice administrator was the final decision-maker on the practice’s new EHR, according to Ericka L. Adler, a partner at the firm of Roetzel & Andress, where she advises physician practices on day-to-day practice management.

That’s because many physician practices are joining accountable care organizations (ACOs) or merging with large healthcare systems, so their choice of EHR is often dictated by the ACO or the hospital down the street.

While they may not have a lot of leverage in today’s environment, physician owners and practice administrators do have to pay attention to the agreements they sign with their EHR vendor. Here are four pieces of advice when faced with a contract:

Get everything in writing.

Physicians at smaller practices trust the sales person they’re working with, said Adler. So much so that they often sign the contract with their EHR vendor without even reviewing it. While her law firm represents thousands of physician practices, none of them ever get in touch to ask her to review the contracts they sign with EHR vendors, she noted.

“That sales person is making you all kinds of promises, but the person you’re talking to now won’t be there in a year. Everything has to be in writing,” she said.

Chances are, these practices are going to be surprised that they agreed to contracts that don’t require the vendor to provide software updates. This was a big issue with ICD-10 and meaningful use, for example. Physician practices were still paying for their EHRs and their vendors had no obligation to update their software, said Adler.

Have an exit strategy.

Before you sign a contract with your EHR vendor, you need to be clear that your practice owns the clinical data that’s housed within the EHR. Your contract needs to spell that out explicitly, advised Adler.

Also, physician practices have to ensure that the contract stipulates how they can get that data back from the vendor if they decide to switch their EHR in the future. If the contract is silent on that topic, physician practices may be in a position where they have to pay the vendor exorbitant fees to receive the patient data - or they can only receive it in paper format.

Establish a milestone-driven payment schedule.

Physician practices need to be clear on what money they owe to the EHR vendor and when they owe it, said Adler. Her advice? Practices should pay a certain percentage when the software is installed, another percentage once the training has been delivered, and the final amount after testing has been completed.

You need to be really specific with payment schedules, said Adler. “Training and support are really important…and sometimes EHR vendors require that you [work with] particular consultants, [which requires the EHR vendor to coordinate that training].”

Remember that software is always on sale.

“Just like cars and furniture, software is always on sale,” said Randy Carpenter, senior vice president of strategic services at Stoltenberg Consulting. “The level of discount you’re able to achieve will depend on a number of factors, including success of the vendor, timing in the quarter or fiscal year and length of agreement you’re willing to enter into.”

Speaking of which, don’t buy or opt in for additional features when you don’t need them for your practice, advised Carpenter. Additional functionality and available modules can always be negotiated from a pricing standpoint - which you should be able to lock in for at least two years - as an option to exercise at a later date if the scope of the practice changes and there’s a need for the additional features.